SLVWD Board Meeting Summary

March 19, 2026

Prepared by Mark Dolson for FSLVW

NOTE: Provided purely as a public service — NOT the official SLVWD Meeting Minutes.

Highlights:

  • Debt Financing

  • AB 2561 Annual Report

  • Renewal of Audit Services

  • Next Board meeting will be at 6:30 PM on April 2, 2026

Preliminaries

Three directors were present, with Director Layng and Director Largay both absent.

There were no changes to the agenda.

There was one public comment on non-agendized topics.  Cynthia Dzendzel of Felton said there was no audio for the first five minutes of the meeting for people attending online.

 

Unfinished Business

None.

 

New Business

Debt Financing

General Manager Jason Lillion introduced this agenda item.  He said the District was planning for $55.3 million in capital improvements over the next five years, paid for by $25.1 million in FY 26-27 and $30.2 million in FYs 28-30. For FY 26-27, the projects are expected to be funded through a combination of grants, fire surcharges, pay-as-you-go (“PAYGO”) sources, and $16.5 million in bond proceeds. For FYs 28-30, the projects are expected to be funded through additional bond issuance and PAYGO sources. Any proposed financing will be on parity with the District’s outstanding obligations, which means they have an equal right to the net revenues of the Water System (i.e., gross revenue less operations and maintenance costs).

On December 4, 2025, the District’s municipal advisor, Ken Dieker of Del Rio Advisors, LLC, presented nine different financing scenarios to the Board.  The recommended option from that meeting was the Public Offering: 25-year Wrapped Debt Service scenario. However, during the discussion, there were concerns raised about the backloading of principal for both the Series 2026 and the possible future issuance in FY 2028.

On February 5, 2026, the District’s municipal advisor again presented to the Board, based upon updated FYE 25 numbers, the option to shorten the proposed term of the Series 2026 from 25 years to 24 years while wrapping the debt service around the existing obligations. The goal is to end up with level aggregate debt service from FY 2027 to FY 2050. This structure prevented the backloading of principal and all the District’s debt would mature at the same time in FY 2050. The direction of the Board was to continue to move forward on preparing the documents for the sale of the Certificates and to bring the financing back to the Board for approval at a future meeting.

An ad-hoc group of the Finance Committee spent time since the meeting of February 5, 2026 reviewing and expanding upon a 30-year pro forma provided by the District’s municipal advisor and then briefed the Board on their findings at the meeting of March 5, 2026. The direction from the Board at the March 5, 2026 meeting was to move forward with the 24-year Wrapped Debt Service scenario and that all future bonds would most likely be structured with level debt service across a 30-year term.

Ken Dieker said the District received an A rating from Standard & Poor's Corporation.  They also applied for a bond insurance and a surety for the cash-funded reserve fund from Build America Mutual and Assured Guaranty.  The impact of the assurance is to raise the rating to AA.  The total aggregate debt service is around $70 million.  The surety brings the debt service down from $70 million to $67 million.  The real benefit is the combination.

Ken said the District will expect a series of bonds in 2028 unless FEMA reimbursements come through.   He noted that his financial model is somewhat different from Bob Russ's model due to lower revenue expectations.  He said he was shooting for the first, second, or fourth week of April for pricing.  The market is extremely volatile right now, tied to the war.  There is also a lot of refunding volume in April.  The District’s debt will be A rated with underlying AA insurance.

Director Fultz said he just wanted an informational item on the agenda once the documents are final.  Ken said he would provide this.  President Russ asked if the loan was prepayable any time after the first ten years.  The answer was yes.

There was no public comment.

Director Fultz moved to adopt the resolution, and President Russ seconded.  The motion passed 3-0.

 

AB 2561 Annual Report

Human Resources Technician Lisa Young introduced this agenda item.  To meet the annual compliance requirements of Assembly Bill 2561 (AB 2561), the District reports, tracks, and presents on job vacancies once annually, including the status of vacancies and recruitment and retention efforts.  The data that the District reports on is based on the previous calendar year, with a snapshot of the activity on December 31 of each year.

The District has two groups of employees: 1) Management/supervisor/confidential; and 2) Classified, and the District shares data for these two units. When vacancies within a single bargaining unit meet or exceed 20% of authorized full-time positions in that bargaining unit, the District provides additional information during the public hearing including: (1) the total number of vacancies; (2) the number of applicants; (3) the average time to fill positions; (4) and opportunities to improve compensation and working conditions for employees in the bargaining unit.

The District saw positive improvements in 2025 vs. 2024, with an overall lower vacancy rate (8.3% vs. 11.0%); and a reduced time to hire (73 days vs. 120 days).  Several potential challenges were addressed: Allowing the Interim General Manager to begin hiring prior to the appointment of a General Manager; partnering with RGS to recruit both a General Manager and a Finance Manager; reviewing, adjusting, and creating appropriate positions; and focusing on promotion from within the organization.

One potential ongoing hiring challenge the District faces is that the SLVWD competes directly with other employers in Silicon Valley who often offer higher pay for similar roles. To address this concern, SLVWD will conduct market equity compensation studies on a regular basis to ensure they are competitive with the market.

Director Smolley asked if this exercise caused HR to do anything different.  Lisa said it did not.  She said she would be concerned if retention starts to fall, but she wouldn’t need this report.  President Russ asked how much of her time this took, and Lisa said it didn’t take much.

 

Renewal of Audit Services

Finance Manager Cheri Freese introduced this agenda item.  She said the District is required to obtain an annual independent audit of its financial statements in accordance with Generally Accepted Auditing Standards (GAAS) and Government Auditing Standards.  The District has utilized the services of the audit firm now operating as C.J. Brown & Company, CPAs since 2013 (the firm previously operated as Fedak & Brown LLP, which performed the District’s audit prior to the firm’s reorganization).  The District has received a proposal from DJ Brown and Company CPAs to provide audit services from 2026 through 2030.

California Government Code Section requires audit partner rotation every six consecutive fiscal years for local government audits to maintain auditor independence and objectivity. The firm has complied with the requirement through the periodic rotation of engagement partners.  Under the proposed agreement, Jonathan Abadesco will serve as the engagement partner for fiscal years 2026 through 2028, after which the firm will rotate to another partner in accordance with state requirements.

The firm is still charging similar fees.   The annual maximum is in the low $30,000 range, but Cheri said she expected the actual charges to be around $24,000 per year.  She said Staff has found C.J. Brown & Company to be responsive, knowledgeable in governmental accounting standards, and familiar with the District’s operations and financial systems. Continuing with the current auditor helps maintain continuity and efficiency in the audit process.  Staff is seeking a three-year approval.

Director Smolley said his previous questions had been answered.  Director Fultz asked why there were no other proposals.  Cheri said, since Jason and she were relatively new, they wanted to keep the same auditing service because it will be beneficial to Cheri over the next few years.  Director Fultz suggested coming back to the Board only if the annual cost exceeds $30,000.  Otherwise, he felt this should be purely an informational item.

 

Consent Agenda

There was one item on the Consent Agenda:

a.     Board Meeting Minutes 3.5.26

This item was accepted without discussion.

 

District Reports

Financial Status Report for January

Director Fultz had some minor comments.  In particular, he asked about the $2 million being kept in a Wells Fargo account.  Cheri said she had transferred $1.3 million of this to an interest-bearing account.


Written Communications

There were no written communications.

 

The meeting was adjourned at 7:35 PM.